2/24/2009 -
Thailand, the biggest rubber exporter, may purchase as much as 200,000 metric tons of the commodity from growers and keep it in storage to reduce supply after prices more than halved last year. "The aim is to draw 100,000 or 200,000 tons from the market," according to Somchai Charnnarongkul, director general of the farm ministry's Department of Agriculture. Global recession has pared demand for car tires, undermining efforts by Thailand, Indonesia and Malaysia, the world's biggest producers, last year to bolster rubber prices by trimming output. The raw material tumbled 56% in 2008, the biggest slump in at least 17 years. Thailand's farm ministry will seek $114.8 million to fund the price support plan. The government will provide funds for farmers to store the rubber in warehouses until prices rise to attractive levels, according to Prime Minister Abhisit Vejjajiva. Thailand may ship 2.6 million tons this year, compared with 2.75 million in 2008, as producers plan to pare production from 3 million metric tons, according to the Thai Rubber Association. Rubber for June delivery advanced 6.5% to 145 yen a kilogram on the Tokyo Commodity Exchange in early January. The commodity fell to a six-year low of 99.8 yen in early December, having reached a 28-year high of 356.9 yen five months earlier.